Georgia Construction, Bond & Lien Law Blog


How Can Georgia’s Mechanics Lien Law Help Me?

Posted in Filing Materialmen's Liens,Materilamen's Liens by Blue Blog on the May 26th, 2015

File a Lien and Collect Your Money

by Mark A. Cobb

Since 1992, our construction law firm has been working with contractors, subcontractors and materialmen to help get them paid by using the advantages established under Georgia’s Mechanics and Materialman’s Lien Law Statutes. From time-to-time, we like to remind our readers of some of the advantages of this law, and offer practical tips to helping them get paid.

What are the different types of liens available to someone who has not received payment on a construction project in Georgia?

Generally speaking, there are many different names for the type of lien this blog article is discussing. Georgians usually refer to the liens filed by contractors and suppliers for nonpayment as “mechanics liens” or “materialman’s Liens”; in addition, some people (or other states) may refer to them as “construction liens”, “contractor liens”, “subcontractor liens”, “supplier liens”, “claim of lien” or something else. Regardless of what you call it, use Georgia’s lien laws to help get paid!

How do liens help me get paid?

It’s important to remember that when a problem occurs, there are different areas of law which may provide relief (like different tools in a tool box). Contract law, for example, governs every contract, and if you provide the labor, materials or services required under a contract, but you do not receive payment, then Georgia’s contract law spells out the rights the parties have. Thus, in a typical non-payment situation, contract law applies and the breaching party will likely have to pay the non-breaching party the amount due. In other words, the entity with whom you contracted owes you the money for your services. In construction scenarios, however, Georgia’s lien laws may offer you remedies (that is, other tools) against other people or entitles.

When you place a lien against someone’s property, you are asking the real estate to serve as collateral for the debt owed to you. And, this makes sense when you consider that the real estate (or the owner of the real estate) is the true beneficiary of your work or materials.  For example, consider the following: an owner contracts with ABC General Contracting to build a building; ABC General Contracting, in turn subcontractors with XYZ Subcontractors for a portion of the work. If ABC fails to pay XYZ, then, under contract law, XYZ Subcontractor can seek payment from ABC General Contracting. If XYZ also files a mechanic’s lien against the project, then XYZ Subcontractor may be able to also seek payment from the Owner because XYZ’s work improved the value of the Owner’s property.  In fact, without XYZ’s work or materials, the Owner’s property would, arguably, have a lower value.  Thus, filing a Materialman’s lien can be similar to getting a retroactive personal guaranty!

Who can claim a lien under Georgia’s lien laws?

Georgia is fairly generous in allowing people (or companies) who haven’t received payment for their materials, labors or services to file a Claim of Lien against the project on which they worked or provided building materials. Thus, the “typical” general contractor, subcontractor, sub-subcontractor, material supplier typically have some type of lien rights; in addition, the Georgia Code allows others lien rights including foresters, land surveyors, and architects. For a more detailed listing of those entitled to file a lien in Georgia, please click here > >

What is the deadline for filing a lien in Georgia?

Unless the potential lien claimant has signed a valid Georgia lien waiver, then the lien must be filed within 90 days of the last day in which the lien claimant actually worked on the real estate.  Be careful, as valid lien waivers can shorten this period to either (i) 90 days from the last day worked or (ii) 60 days from the date of the lien waiver whichever is shorter!  If you want an easy way to calculate these deadlines, then please request our Georgia materialmen’s deadline calculator > >

How long do liens last in Georgia?

Unless a Notice of Contest of Lien is filed (usually by the owner of the project or the general contractor), Georgia’s liens expire one year from the date of filing. In order to prevent this automatic expiration of the claim of lien, the lien claimant must “perfect” prior to the lien’s expiration. There are several methods to perfecting a lien in Georgia, but the most common method is through filing a lawsuit to collect the money which you are owed.

Does filing a lien against someone’s property guarantee payment?

Although Georgia’s Mechanics and Materialmen’s Lien Act is a very useful tool for improving the odds that you will be paid, there are no guarantees; thus, we typically recommend using the full arsenal of collection tools at your disposal.

If filing liens for nonpayment is a collection tool, are there other tools which my company should consider using to prevent payment problems?

Absolutely! There is a wide array of tools for construction professionals to improve their collection rate. Needless to say, the starting point, for you is likely either strong credit practices and a good, written contract. In addition, many contractors and subcontractors fail to exercise due diligence to see their credit risks. In addition, other common tools for the construction industry include preliminary liens, notices of furnishing, payment bond claims, lien claims, affidavits of nonpayment, and claims against retainage amounts. For more information on some of these useful collection tools, please download our helpful manual for filing liens in Georgia by clicking here > >

Do you have another question for our lien and payment bond attorneys, if so, please contact us today to enforce your lien rights and increase your ability to get paid.

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